Lucky that California got a head start.
It’s now well-known that California is the first state to pass legislation to set up a Health Benefit Exchange as called for through the federal health reform law. Given the complex nature and large scope of California’s health care system, it’s a good thing the state got started quickly, state officials have been saying, because California may need every moment of time between now and Jan. 1, 2014, to organize the thing.
“There are five key deliverables,” according to Katie Marcellus, assistant secretary for the state’s Health and Human Services Agency.
“In January 2013 we need to get government certification of the exchange,” Marcellus said. “Then in June 2013 all of the IT testing needs to be completed. Open enrollment starts in mid to late 2013. And in January 2014, we open for business.”
The fifth deliverable is often overlooked but might be the most important deadline, she said, noting, “By January 2015, the exchange needs to be financially self-sustaining.”
“There are just so many things to do,” Marcellus said. “There are just so many projects.”
Four Major Efforts
“I would break it down into about four general categories, four major buckets,” Pat Powers, interim executive director of the exchange, said.
“There is the administration and IT component, which includes the portal interface. There are the eligibility and enrollment rules,” Powers said. “Third one is certification of qualified health plans, and all of the contracting with health plans. And there’s consumer outreach and interface, which includes the website and the consumer navigator program. Those are the big operational buckets.”
Some of those elements cross over into each other, she said. For instance, the information technology task is really spread all over the entire exchange project, from creating an electronic calculator to help consumers choose an insurance policy, to streamlining the eligibility system and setting up a “no-wrong-door” approach.
“Each of these will be a lot of work,” Powers said. “And each one has to integrate with other programs, so each one is pretty complicated.”
The buckets and what goes into them:
- General administration and IT. IT is a big operational part of running this system. But there’s much more that needs administrative organization, from setting up eventual financial sustainability to maintaining general oversight of all of the programs. “Financial integrity of the program is a big one,” Powers said. “And that includes applying for the federal establishment grant and ensuring federal funding all along the way. It means setting up and following a sustainability model.”
- Eligibility and enrollment. “This is complex all by itself,” Powers said. It includes setting up a no-wrong-door policy where patients applying for Medi-Cal, Healthy Families and other state programs are seamlessly integrated into the proper set of care programs. It includes advance payments of the premium tax credit program, and a clean system of coordination that gives automatic notification of changes in eligibility. Medi-Cal is California’s Medicaid program.
- Health plan contracting. This includes certifying health plans to see if they qualify and setting rules for selective contracting. “There are also certain things the feds require,” Powers said, “like a risk-adjustment assessment. That is, if one health plan out of four has a higher-risk population, you would adjust for that population across all those plans.” And throw in all of the performance metrics, too, Powers said — for price, quality, customer service and patient experience.
- Consumer outreach. This could loosely be defined as marketing, letting people know the exchange is available and explaining what it is. That includes setting up a call center, making a plan for consumer outreach and education, creating a website and a navigator program so consumers can shop for policies and establishing relationships with health care insurance brokers.
A lot of planning and preparation will go into the last half of 2011, and a lot of testing and fine-tuning will happen during 2013 — meaning that the bulk of those tasks will be developed in 2012, Powers said.
“There is a lot to do with this program to get it going. We have a large state with a big population,” she said. “But the good news is, we have some models to go on, models that work. Most of these pieces have been done before.”
First Steps
“We’re trying to be really methodical about this,” Powers said. “We’re laying out the foundation for funding, for the establishment grant, that in and of itself is the primary goal.”
California hopes to map out a complete plan in time to meet the Sept. 2011 deadline for getting an establishment grant. Exchange board member Kim Belshé is spearheading the supervision of that effort.
“That will allow us to have more resources to fund these buckets,” Powers said.
Finding a long-term executive director also is high on the to-do list.
“Getting that permanent leadership is important,” Marcellus said. “That’s something we’re looking at right now.”
The state also will conduct a gap analysis, Marcellus said, to delineate the holes in the IT system and administrative functions.
The main thing, Powers said, is to make sure everything is clear, because all of these tasks will be going at the same time, and often interweaving, so clarity of purpose and intent is key, she said — and she wants to be as specific as possible.
“Right now we’re looking at the business principles that will guide eligibility and enrollment, and setting up a process for how the exchange will look in regard to eligibility and enrollment,” Powers said. “We need to figure out what the requirements are for the federal government, given those things, and then suggesting some of these business principles for the exchange.”
Hopefully, with enough work done up front, consumers will be able to view their choices laid out in a clear and concise fashion, Powers said.
“What we’re trying to build here is a seamless system for health insurance that meets patients’ needs,” Powers said. “One unified picture that works for them.”
Marketing Marks New Territory for California
Any one of those exchange buckets could spill over with the vast number of tasks and choices in them, but there’s one aspect of the exchange that is relatively new to California and that worries Chad Silva, policy director for the Latino Coalition for a Healthy California.
“A huge chunk of work that’s looming is the marketing of the exchange,” Silva said.
One of the biggest blocks of potential patients is young Latinos, Silva said. “It’s in their interest to attract this population,” he said, “because it’s young and pretty healthy for the most part. And it’s the biggest block of young folks in the state.”
According to Silva, Latinos make up about half of the youth population in California. Targeting the youth and the middle-class Latino market is foreign to California policymakers, and that includes much of the work done at the coalition, Silva said.
“One of the issues is, Latino health care tends to get polarized to low-income Latinos, and then to undocumented immigrants. But the other side is, there is a large and growing Latino middle class, so that’s another side of the messaging they need to think about. It’s one that doesn’t necessarily get involved a lot,” Silva said. “Reaching those middle-income folks is going to be a harder task. They are a quiet but influential group of folks.”
Filling Out the Picture
Silva likened the many moving parts of the exchange to a mosaic — fitting many small and large pieces together to make something beautiful.
“You have these tiny little pieces,” he said. “You’re trying to make a picture and you don’t know quite what it looks like yet. You don’t precisely know where to put those pieces, and you’re building it and hoping the image is going to appear.”
Pat Powers had a different analogy. It’s more like a computer graphic or a photograph, she said.
“We’re trying to see one unified picture that works for patients,” Powers said.
“Right now, we’re putting the big pieces into place. Over time, you add a few more pixels, then more pixels — so by 2014, we’ll have a really clear picture,” she said.
Exchange officials hope the picture will be one California can hold up for the rest of the nation to copy.